First, The Bad News . . .

You've got a problem. It might be that you've just lost
a big client, or there's a major production breakdown, or a key
staffer is leaving-whatever it is, it's big, and you need to
break the news to your employees. How can you do it without
demoralizing them and further hurting the company? Most important,
don't put it off, says T.O. Collier, president of Nimblewill
Creek Consulting Inc., a human resources practices consulting firm
in Dahlonega, Georgia. There's nothing to be gained and much to
be lost by waiting. "Rumors get out," Collier says.
"If you don't tell your people, they're going to find
out anyway or they're going to make up half-truths."

If your company is small enough, make your announcement in
person; if that's not practical, have managers gather employees
together and share the information. People need the opportunity to
react and ask questions, and they can't do that when they just
receive a memo.

When making your announcement, tell employees what you know and
be honest about what you don't know. "Lay it out as best
you can," Collier says. "Say 'here's what has
happened, here's what we know, here's how we think it will
affect us.' Then open it up to questions." If answering a
question would reveal confidential information you're not ready
to release or perhaps that you can't release because of legal
issues, be honest. "You can't always tell everything, but
as you can, keep people informed."

When the bad news includes the probability of job losses, give
as much notice as possible. If you can afford it, offer retention
incentives to encourage people to stay with you as long as you need
them, rather than jumping ship at the first opportunity. "You
may lose some people, but most will stay with you and see
what's going to happen," says Collier. "What you
don't want is everybody walking out the door at once."

While things are being resolved, hold regular informational
meetings and also talk to everyone informally. Make sure people are
asking questions and getting answers.

Jacquelyn Lynn left the corporate world more than 14 years
ago and has been writing about business and management from her
home office in Winter Park, Florida, ever since.